INVESTOR PRESENTATION Preliminary Results for year ended 28 March - - PowerPoint PPT Presentation

INVESTOR PRESENTATION

J U L Y 2 0 2 0

Preliminary Results for year ended 28 March 2020

1

Table of contents

Covid-19 – FY21 Q1 Impact and Current Trading 01 FY 2020 Results Overview 02 Strategy and Outlook 03 Appendix 04

• 1. COVID-19 – FY21 Q1 IMPACT AND CURRENT TRADING

COVID-19 – FY21 Q1 IMPACT AND CURRENT TRADING Current status

3

Credit rating

• Moody’s, Fitch, and S&P have all affirmed their previous credit ratings of B1, BB-, and BB-, respectively

(albeit with a ‘negative outlook’ due to the economic environment)

Revenue has recovered strongly following the ending of lockdowns Liquidity remains strong

• Q1 total operating cash flow: only c. -£7 million (not dissimilar to a normal year)
• Net Debt (pre IFRS-16) at 30 June: c. £385 million
• Cash and undrawn credit lines: c. £180 million

(£ millions) April May June Total UK & Europe Soft Flooring 3.1 6.9 24.5 34.5 UK & Europe Ceramic Tiles 11.8 20.2 28.2 60.3 Australia 5.3 9.4 8.6 23.3 Total 20.2 36.4 61.4 118.0 % of Pre-Covid-19 budget 35% 55% 102% 64%

COVID-19 – FY21 Q1 IMPACT AND CURRENT TRADING Victoria is in a strong financial and market position

4

Highly experienced and motivated operational management

• Almost all managers are meaningful shareholders
• Many have been in the industry for 30 years or more
• A track record of successfully navigating through deep economic downturns

Diversified customer base

• Creditworthy
• No customer concentration

Resilient balance sheet / adequate cash liquidity

• In July 2019 and in January 2020 Victoria issued a total of €500 million of Senior Secured Notes (“bonds”). These bonds

are not due before July 2024 and have no maintenance financial covenants

• £75m committed RCF, also maturing 2024

Low operational gearing

• c. 54% of operating costs are wholly variable with revenue. This includes raw materials, energy, and freight
• c. 36% is semi-variable (which the Board defines as being capable of being significantly changed within 60 days) such as

direct labour, logistics, and marketing expenditure

• c. 10% is fixed

Secure supply chain

• Highly diversified and invariably localised to the key manufacturing plants. Access to raw materials is secure

Wide geographic spread of both manufacturing operations and customers

• The effect on Group revenue (and its subsequent recovery) spread over time, moderating the impact

• 2. FY 2020 RESULTS OVERVIEW

FY 2020 RESULTS OVERVIEW Financial highlights

“FY 2020 was another record year in terms of revenues and margins, with consistent strong cash flow conversion”

• REVENUE: £621.5m

‒ +10% growth ‒ +0.4% like-for-like growth1

• EBITDA2: £118.1m

‒ Post-IFRS 16 ‒ 19.0% margin ‒ +70bps organic improvement

• PBT2: £50.7m, EPS: 28.42p

‒ Decline from prior year (£57.3m, 35.25p) due to increase in finance costs

Note 1. Like-for-like revenue growth shown on a constant currency basis and adjusted to remove the impact of acquisitions 2. EBITDA, PBT and EPS shown before increase in credit loss provision, and exceptional and non-underlying items. EPS shown on a fully-diluted basis 3. Operating cash flow defined as underlying EBITDA, less non-cash items, plus movement in working capital. Free cash flow is before acquisition, refinancing and other exceptional items 4. Net debt shown before right-of-use lease liabilities, bond issue premia and prepaid finance costs. Leverage (Net debt / underlying EBITDA) consistent with the measure used by our lending banks

• OPERATING CASH FLOW3: £97.6m

‒ 92% conversion from pre-IFRS 16 EBITDA ‒ Free cash generated of £39.2 million, after tax, interest and replacement capex

• NET DEBT4: £365.9m

‒ Flat on prior year on a like-for-like basis ‒ Adverse FX increase of £24.8m

• LEVERAGE4: 3.0x

‒ Reduction of 0.2x EBITDA

6

FY 2020 RESULTS OVERVIEW Financial highlights (continued)

• Covid-19 impact:

‒ Revenue in the month of March down -9% year-on-year due to Covid-19, which had a notable adverse impact on overall annual like-for-like sales growth and margins

• Acquisitions:

‒ 4 much smaller acquisitions, with total consideration paid in the year of £11.0m:

• G Tuft (UK & Europe Soft Flooring, May ‘19) – strategic acquisition of contract manufacturing supplier with no profit
• Ibero (UK & Europe Ceramic Tiles, Aug ‘19) – high-end ceramic tile manufacturer in Spain with c. €30m revenue
• Estillon (UK & Europe Soft Flooring, Nov ‘19) – underlay distributor in the Netherlands with c. €10m revenue
• Ascot (UK & Europe Ceramic Tiles, Feb ‘20) – mid-high end ceramic tile manufacturer in Italy with €60m revenue
• Australia return to growth:

‒ Year-on-year growth returned to +4% in H2 (constant currency) following -5% reported in H1

• Like-for-like EBITDA margin improvement:

‒ Reported margins impacted by the mix effect of lower-margin acquisitions and the adoption of IFRS 16 ‒ Like-for-like organic margin improvement of c. +70bps despite Covid-19 impact in March, comprising c. +170bps in UK & Europe Soft Flooring, c. +30bps in UK & Europe Ceramic Tiles, and c. -110bps in Australia (due to decline in H1, but reversing in H2)

• Cash generation:

‒

• c. £40m of free cash flow in the year (after interest, tax and replacement capex), of which
• c. £12m invested in organic projects (c. £8m growth capex, c. £4m final parts of previous project exceptional costs), and
• c. £27m invested in acquisitions and associated M&A costs

7

FY 2020 RESULTS OVERVIEW Operational highlights

UK & Europe Soft Flooring

• Carpet manufacturing:

‒ Re-focus on margin in H2 as confirmed last year, in the aftermath of a more volume oriented approach in FH19 and H1 FY20 ‒ Further rightsizing of production resource following significant reorganisation project in 2018. In the last 18 months, output has increased with approximately 115 fewer FTEs ‒ Implementation of yarn break detection systems, improving quality and reducing waste ‒ Gradual increase in operating speed of the new finishing line, with significant further quality improvement

• Underlay manufacturing:

‒ Completion of purpose-built conveyor system linking five production lines to warehouse, increasing efficiency and safety ‒ Reduction in off-site storage and reconfiguration of onsite warehouse ‒ Reduction in working capital through JIT arrangements with raw material suppliers ‒ Trading up in accessories

• Logistics:

‒ Further improvement of service proposition to 85% within 2 days (from 68% in FY19) ‒ Distribution Centre efficiency gains from 31 to 45 cuts per table per hour ‒ Extra cutting table added – now 6 cutting tables within 3 DCs with an overall capacity of 24,000 cuts per week ‒ Invested in a fully-automated sortation system, contributing to efficient and accurate loading ‒ Ultimate target (now possible within existing infrastructure) of next day delivery for over 90% of orders

8

FY 2020 RESULTS OVERVIEW Operational highlights (continued)

UK & Europe Ceramic Tiles

• Italy:

‒ Further refinement of manufacturing processes at Serra boosting output by 10% on 2 out of 3 lines ‒ Resolved capacity constraint at Serra in porcelain segment through the lease of Ascot, adding 7 million m² of capacity ‒ SKU rationalisation of c. 40 % of the acquired collection at Ascot

• Spain:

‒ Integration of Saloni and Keraben manufacturing completed, allowing use of only 12 lines out of 15 available to produce the same overall quantity ‒ Developing purpose-built ranges for the growing DIY segment ‒ Integration of Ibero to come, involving both consolidation of both production and brand / marketing

Australia

• Positive transition:

‒ Main objectives under the previous challenging market conditions in HY1 were three-fold: rightsizing of costs, cash conservation and margin protection ‒ Integration of Melbourne underlay manufacturing into the Sydney factory was completed in Q3 FY20, delivering the targeted annual upside of AUD 1.5 million ‒ Significant focus on product development in new styles of carpet and LVT, which should benefit from H2 this year

9

FY 2020 RESULTS OVERVIEW Segmental performance

10

Note 1. Figures presented are underlying, pre-exceptional and before the increase in credit loss provision 2. Continuing operations - not including a small disposal from UK & Europe soft flooring division

Continuing operations £m 2020 2019

UK & Europe – soft flooring UK & Europe – ceramic tiles Australia Central costs TOTAL UK & Europe – soft flooring UK & Europe – ceramic tiles Australia Central costs TOTAL

Revenue 282.0 243.9 95.6

• 621.5

272.9 193.9 100.0

• 566.8

% growth +3.3% +25.7%

• 4.4%

n/a +9.7% +29.1% +311.5% +25.5% n/a +28.1% % LFL organic growth

• +2.3%
• 1.0%

n/a +0.4% +7.3%

• 1.3%
• 6.9%

n/a +2.0% Gross profit 95.2 102.2 29.0

• 226.4

86.4 87.6 27.9

• 201.9

% margin 33.8% 41.9% 30.3%

• 36.4%

31.7% 45.2% 27.9%

• 35.6%

Underlying EBITDA (post-IFRS 16)1 41.3 68.3 10.3 (1.8) 118.1 n/a n/a n/a n/a n/a % margin 14.6% 28.0% 10.8%

• 19.0%

n/a n/a n/a n/a n/a Underlying EBITDA (pre-IFRS 16)1 34.8 66.2 8.1 (1.8) 107.2 29.3 59.3 9.6 (1.6) 96.6 % margin 12.3% 27.1% 8.5%

• 17.3%

10.8% 30.7% 9.6%

• 17.0%

Underlying EBIT1 21.7 51.5 5.8 (1.9) 77.1 17.0 48.3 6.8 (1.7) 70.5 % margin 7.7% 21.1% 6.1%

• 12.4%

6.2% 24.9% 6.8%

• 12.4%

Movement in credit loss provision (due to Covid-19 in 2020) (1.7) (1.0) (0.1)

• (2.8)

(0.1) (0.1) (0.1)

• (0.3)

11

FY 2020 RESULTS OVERVIEW UK & Europe Soft Flooring – 170bps organic margin improvement

Note 1. Organic impact strips out the effect of acquisitions made during the current year and comparative period 2. Continuing operations - not including a small disposal from UK & Europe soft flooring division

UK & Europe Soft Flooring - underlying EBITDA margin bridge1,2

12

FY 2020 RESULTS OVERVIEW UK & Europe Ceramic Tiles – 30bps organic margin improvement

Note 1. Organic impact strips out the effect of acquisitions made during the current year and comparative period 2. Continuing operations - not including a small disposal from UK & Europe soft flooring division

UK & Europe Ceramic Tiles - underlying EBITDA margin bridge1,2

13

FY 2020 RESULTS OVERVIEW Impact of adoption of IFRS 16

£m 2020

Initial asset recognised (as at 31 March 19) 56.1 Initial liability recognised (as at 31 March 19) 57.3 EBITDA 10.9 EBIT 1.5 PBT (1.0)

• Adoption of IFRS 16 had an impact on PBT in FY20 of -£1.0m
• Adverse impact to be expected, as previous linear operating cost has been replaced with: (i) a linear depreciation cost, plus (ii) a

logarithmic, reducing finance cost (which ultimately, over the life of any given lease, arrive at the same total)

• Hence, for each lease, there is an increase in initial annual cost on adoption, but reduction in annual cost in the future
• Cash flows of course remain unaffected

14

FY 2020 RESULTS OVERVIEW Non-underlying items

Non-underlying items from continuing operations, £m 2020 2019

Covid-19 related Refinancing related Acquisition related Other Total Exceptional items Acquisition and disposal related costs (2.2) (1.8) Reorganisation costs (3.5) (12.7) Negative goodwill arising on acquisition 5.8 Goodwill impairment (50.0) Other items (5.9) (50.0)

• 3.6

(3.5) (20.4) Other operational items Non-cash share incentive plan charge (5.9) (1.9) Amortisation of acquired intangibles (25.0) (22.5) Acquisition-related performance plan charge (1.5)

• (25.0)

(5.9) (25.9) Finance items Release of prepaid finance costs (4.4) (3.1) Underwriting fees and costs relating to previous bank facilities (6.5) Write-down of derivative asset representing value of bond embedded call option (7.3) Unsecured loan redemption premium credit / (charge) 0.2 Deferred consideration liabilities, unwinding of present value and other adjustments (3.4) (7.2) Mark to market adjustments on foreign exchange forward contracts 3.2 (0.7) Translation difference on foreign currency loans (13.0) (3.6)

• (18.0)

(3.4) (9.8) (14.6) Key: Cash items

FY 2020 RESULTS OVERVIEW Consistent strong operational cash generation

15

Note 1. 2020 figures are from continuing operations and before the increase in credit loss provision 2. LFL revenue growth shown on a constant currency basis and adjusted to remove the impact of acquisitions and restructuring effects £m 2015 2016 2017 2018 2019 2020 1 2015-20 CAGR

Revenue 127 255 330 425 574 622 % growth 77.9% 100.9% 29.5% 28.6% 35.3% 9.7% % like for like growth

• 0.2%

2.8% 4.6% 1.6%2 2.0%2 0.5% Underlying EBITDA 16 32 46 65 106 118 % margin 12.4% 12.7% 13.8% 15.2% 16.8% 19.0% Payments under right-of-use lease obligations

• (11.6)

Non-cash items (0.2) (0.1) (0.5) (0.2) (0.8) (0.8) Underlying movement in working capital 2.2 0.1 (1.6) (0.2) 10.2 (8.0) Operating cash flow before interest, tax and exceptional items 18 32 44 64 106 98 40.2% % EBITDA conversion (pre IFRS 16) 113% 100% 95% 99% 110% 92% Interest paid (1) (3) (4) (7) (17) (25) Income tax paid (2) (3) (6) (11) (16) (9) Replacement capex (5) (10) (11) (14) (24) (25) Proceeds from fixed asset disposals 1 1

• 2

1 1 Free cash flow before exceptional items 10 17 24 35 50 39 31.4% % EBIT conversion 106% 78% 70% 72% 72% 51% Expansionary capex

• (14)

(21) (8) Deferred consideration and earn-out payments (1) (8) (10) (15) (9) (12) Exceptional re-org cash items

• (3)

(12) (3) Dividends

16

FY 2020 RESULTS OVERVIEW

Free cash flow re-invested, hence little movement in net debt (before FX and IFRS 16)

Note 1. Net debt shown before right-of-use lease liabilities, bond issue premia and prepaid finance costs, consistent with the measure used by our lending banks

17

FY 2020 RESULTS OVERVIEW Reduction in leverage

£m 2020 2019 Net cash and cash equivalents 174.7 60.2 Senior secured debt (at par) (523.4) (386.9) Unsecured loans (15.6) (11.6) Finance leases and hire purchase arrangements (pre IFRS 16) (1.6) (1.6) Net debt (before obligations under right-of-use leases) (365.9) (339.9) Bond issue premium - cash (7.5)

• Bond issue premium - non-cash (related to embedded redemption option)

(6.8)

• Pre paid finance costs

9.9 3.6 Obligations under right-of-use leases (incremental) (78.2)

• Statutory net debt (net of prepaid finance costs)

(448.5) (336.3) Adjusted net debt / EBITDA 3.0x 3.2x

• 3. STRATEGY AND OUTLOOK

STRATEGY AND OUTLOOK 2020/21 outlook positive

19

Positive trading in all key geographies post-lockdown

• Group revenues recovered to 100% of 2020/21 pre-Covid budget
• Sustained demand in countries that exited lockdown in April

Manufacturing will be matched to demand

• Victoria’s distribution model provides high visibility of end-user (consumer) demand & minimal de-stocking risk
• Production will be matched to demand to control costs and minimise working capital

Consumer spending on home furnishings is likely to be more robust than spending generally

• Online businesses specialising in home decorating (which have not been adversely impacted by lockdowns; Wayfair is a

good example) have seen increased consumer purchasing

• Since lockdowns have eased, activities around house sales (one of the key drivers of redecorating) is higher than usual
• Throughout Europe consumer debt has fallen / savings increased as a result of government support schemes and inability

to spend on travel and entertainment, etc.

• Ongoing ‘work from home’ drive will continue to motivate consumers to improve their domestic environment

Acquisitions – VCP is actively reviewing opportunities to deploy capital

• Motivated sellers
• Retirement
• Financially distressed

Complementary strategic acquisitions

• Cautious origination and execution process
• 13 acquisitions made since 2013, diversifying the

Group’s products and end-markets

7.2% 12.4% 12.7% 13.8% 15.2% 16.8% 17.3% FY14 FY15 FY16 FY17 FY18 FY19 FY20

Organic growth initiatives

• Development of new brands and new product

ranges, broadening target markets

• Development of entirely new, self-designed LVT

range in UK and Australia

• Leveraging of cross-selling opportunities
• Co-ordinated cross-product approach to contract

and market specification

STRATEGY AND OUTLOOK

Victoria continues to adopt a consistent strategy, as applied over the last six years

Synergies and integration to drive margin Sustainable organic and acquisitive growth Generation of free cash flow to enable deleveraging

Source: Company information. (1) Operating cashflow is calculated as underlying EBITDA, plus the movement in working capital, less maintenance capex and less non-cash items. (2) FY20 EBITDA margin is pre-IFRS 16 and before increase in credit loss provision

1 2 3

Customer-facing activities (design, branding, sales and marketing) are maintained independently Commercial synergies drive revenue growth Operational synergies (procurement, production, logistics and IT) drive margin expansion Underlying EBITDA margin (%) Free Cash Flow before exceptional items (£m)

8.1 10.0 17.2 23.7 35.0 50.4 39.2 FY14 FY15 FY16 FY17 FY18 FY19 FY20

A B High free cash conversion Leverage reduction Acquisition criteria

• Growing businesses
• Sustainable above average margins
• Broad distribution channels
• Modern plant and facilities
• Committed management team

20

STRATEGY AND OUTLOOK LVT – Luxury Vinyl Tile

21 DEMAND

• LVT demand growing much slower in UK/Europe than in the US:
• 2017 sales: 59m sqm (total flooring market: 2,240m sqm);
• CAGR 2017-22: 2.3%
• European consumer reluctance to install synthetic versus natural product
• Displacing laminates, vinyl, not ceramics or carpet

MANUFACTURE

• Victoria designs in-house and decides specification.
• Manufacturing is outsourced.
• Unlimited scalability,
• Latest technology fast changing
• Flexibility,
• Nil production risk,
• Low operational gearing

DISTRIBUTE

• Victoria has broad channels to market, with the key one - given LVT’s mid to high-end

positioning - being direct sales to thousands of specialist, independent retailers.

• Satisfying all flooring category demand is a key part of the customer proposition and a

key defensive quality of the Company

• 4. APPENDIX

23

Note 1. Underlying operating profit and underlying PBT shown before increase in credit loss provision

March 2020 income statement

Continuing operations £m 2020 2019 2020 margin Revenue 621.5 566.8 Cost of sales (395.1) (364.8) Gross profit 226.4 202.0 36.4% Distribution and admin. expenses (153.3) (134.6) Other operating income 4.0 3.1 Underlying operating profit 77.1 70.5 12.4% Underlying finance costs (26.3) (13.1) Underlying PBT 50.7 57.3 8.2% Credit loss provision (2.8) (0.3) Amortisation of acquired intangibles (25.0) (22.5) Exceptional costs (5.9) (23.8) Exceptional goodwill impairment (50.0)

• Non-underlying finance costs

(18.2) (10.9) Translation difference on foreign currency loans (13.0) (3.6) Reported PBT (64.0) (3.8)

24

March 2020 balance sheet

£m 2020 2019 Property, plant & equipment 211.8 190.8 Current assets 309.5 256.5 Current liabilities (210.1) (152.0) Non-current liabilities (16.8) (15.0) Net tangible operating assets 294.4 280.3 Net cash and cash equivalents 174.7 60.2 Senior secured debt (at par) (523.4) (386.9) Bond issue premium - cash (7.5)

• Bond issue premium - non-cash (related to embedded redemption option)

(6.8)

• Unsecured loans

(15.6) (11.6) Finance leases and hire purchase arrangements (pre IFRS 16)

• (1.6)

Obligations under right-of-use leases (79.8)

• Pre paid finance costs

9.9 3.6 Net debt including right-of-use leases (448.5) (336.3) Goodwill and intangibles 439.9 465.2 Deferred tax liability (64.7) (60.3) Right-of-use lease assets 78.5

• Deferred and contingent earn-out liabilities

(39.0) (29.1) Intangible assets and other items 414.7 375.8 Overall net assets 260.6 319.9

Diversified business across products, customers and geographies

Key investment highlights

The Victoria Group presents a unique credit story Global business with a focus on the mid to high-end products

1

Stable flooring market underpinned by the resilient improvement and repair segment

2

High structural barriers to entry

3 4

Low operational gearing through a flexible cost base and limited capex intensity

5

Proven acquisition track record and ability to realise synergies

6

25

Experienced management team with proven track record of sustainable value creation

7

Underlay and accessories

1 Global business with a focus on the mid to high-end products

(1) Adj. EBITDA margin is post IFRS 16 and before credit loss provision (2) Largest UK manufacturer by volume. (3) By sales.

26 Ceramic tiles

(28% Adj. EBITDA margin1)

Soft flooring

(14% Adj. EBITDA margin1)

Brands span from mid-end mass market up to high- end covering every price point Market position UK & Europe Australia UK & Europe

Strong market positions across key markets in UK Carpets(2) in UK Underlay and accessories(2) in Underlay and accessories(3)

#1 #1

in Carpets(3)

#2 #1

Artificial grass LVT Carpet LVT Underlay and accessories Carpet

Global business with a focus on the mid to high-end products

Sydney Production Melbourne Production Lancashire Production Newport, Wales Production Keighly Production Dumfries Production Dewsbury Production Kidderminster, West Midlands Head office County Durham Production

27

Employees: UK & Europe: c. 3,050 Australia: c. 350

Aalten, Netherlands Oss, Netherlands Ronse, Belgium Sassuolo, Italy Production Castellón, Spain Production

UK: 31%

• f EBITDA

Australia: 8%

• f EBITDA

Spain: 44%

• f EBITDA

Benelux: 4%

• f EBITDA

Italy: 13%

• f EBITDA

Note: Figures based on FY21 management budget

1

Significant operational improvement from synergy and reorganisation projects Enhanced logistic capabilities through several distribution centres across the UK Proximity of production sites to domestic market allows Victoria to service demand effectively

Underlying EBITDA by Country of Origin:

Ceramic tiles 62% Carpets 18% Underlay 16% Artificial Grass 4% UK 28% Spain 24% France 10% Australia… Rest of Europe 17% Other 11% Independent retailers 43% National retailers 24% DIY retailers 6% Wholesalers / Distributors 22% Commercial – hospitality, leisure and construction 1% Other 4%

28

2 Diversified business across products, customers and geographies

Well balanced product portfolio Highly diversified geographic exposure Low customer concentration Multi-channel customer base

Wide product offering increases cross selling

• pportunities,

visibility and pricing power Flexibility to produce in and serve multiple geographies Largest group of customers are independent flooring retailers having brand loyalty and long term relationships Split of revenue by customer type(1) Split of EBITDA by destination country(1) Split of EBITDA by product category(1) Split of revenue by key customer(1)

3% 3% 3% 2% 1% 1% 1% 1% 1% 1% 82%

Top 10 customers account for 18% sales with largest customer accounting for 3%

Note: (1) Figures based on FY19 pro-forma

3 Stable flooring market underpinned by the resilient improvement

and repair segment

Source: Freedonia Global Flooring Market Report (Jan-19)

Improvement & repair is the primary driver of the Western European and Australian residential flooring markets

85% 15%

I&R - Non-Cyclical New Build - Cyclical

FY17 1.2bn sqm

29

Key advantages of I&R vs. new build

• End users less price sensitive
• More stable through the cycle

given lower cost vs. new build

2,100 2,240 2,395 2,535 173 222 231 254 2,273 2,462 2,626 2,789 FY12 FY17 FY22 FY27 Western Europe Australia

We operate in developed markets with steady growth drivers

Western European and Australian flooring market (m sqm)

5.1% 1.3% CAGR FY12-17 CAGR FY17-22 1.6% 1.3% 0.8% 1.3%

I&R end market 5-6x larger than new construction

4 High structural barriers to entry

Fragmented customer base – focus on long-standing relationships with broad network of independent retailers Established and trusted brands – well known with retailers for certainty of supply and quality Product handling – specialist warehousing and distribution required; difficult over long distances Scale is key – smaller operations / contract manufacturing significantly less efficient than long production runs Proximity to customers helps influence designs/trends and maintain customer relationships Deep product knowledge and technical expertise – vital to underpin operational efficiency and innovation 30

5

Note: Based on underlying FY19 figures. (1) Represent costs within underlying EBITDA.

Capex % of revenue – low maintenance requirement

Low operational gearing through a flexible cost base and limited capex intensity

31

3.7% 3.3% 4.0% 4.1% 1.0% 2.2% 3.4% 1.4%

FY17 FY18 FY19 FY20

Maintenance Expansionary

Cost of sales(1) SG&A(1) Total cost base(1)

Materials 45% Direct Labour 11% Overheads 6%

Variable cost – varies directly with revenues Semi-variable cost – flexibility within a few months Fixed cost (can still be subject to synergies) 62%

• f

revenues

Logistics 11% Sales & Marketing 8% Administration 2%

21%

• f

revenues

Variable 45% Semi- variable 30% Fixed 8%

83%

• f

revenues

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY201

Underlying EBITDA £2.3m £5.1m £15.8m £32.3m £45.7m £64.7m £96.3m £107.2m % margin 3.0% 7.0% 12.4% 12.7% 13.8% 15.2% 16.8% 17.3%

Value accretive acquisitions driving EBITDA growth

6 Proven acquisition track record and ability to realise synergies

Listed

• n AIM

in 2013 Acquired Nov-13 Acquired Sep-14 Acquired Jan-15 Acquired Sep-15 Acquired Oct-16 Acquired Feb-17 Acquired Nov-17 Acquired Jun-17 Acquired Dec-17 Acquired Aug-15 Acquired Aug-18

32

Built meaningful scale since 2013 with 17 acquisitions Keraben, Serra & Saloni propelled group to a strong market position in European Ceramic tiles Better buying power on raw materials Rationalisation of product lines and cross selling via new distribution channels Ability to affect price increases Distribution, warehousing and logistics Consolidation of manufacturing capacity

Consolidator in a fragmented industry Synergies create strong levers for margin expansion

2013 2014 2015 2016 2017 2018 2019 2020

Source: Company information. (1) FY20 figures from continuing operations, before IFRS 16 and movement in credit loss provision

Acquired May-19 Acquired Nov-19 Acquired Aug-19 Acquired Mar-20

7 Experienced management team with proven track record of

sustainable value creation

33

Philippe Hamers Chief Executive

Retention of management

All managers retained post acquisition earn-out period ,excluding retirees Almost all managers have meaningful amounts of their net worth invested in VCP Of the [17] acquisitions to date, [8] have completed earn-out and [5] did not have earn-

• uts

Geoffrey Wilding Executive Chairman

Wider Management Team

[15] Managing Directors responsible for individual business units [20 years] of average industry experience Actively incentivised in Victoria’s future with significant investment in shares, LTIP plans, and cross-unit Board membership / project Experience, product knowledge, enthusiasm, skill second to none

Michael Scott Group Finance Director

Revenues (£m) 71 EBITDA margin (%) 7.2% Market Cap (£m) 23 FY14

Value Creation

622 17.3%(1)

• Adj. PF 2020

301(2)

Note: (1) FY20 EBITDA margin based on underlying EBITDA, pre IFRS 16 and before movement in credit loss provision, from continuing operations (2) As of 21 July 2020.

Shareholder register (16 July 2020)

34 Rank Investor Name Shareholding % 1 Invesco 25,826,095 20.60 2 Mr Geoff Wilding 22,438,650 17.89 3 Spruce House Investment Mgt 18,570,000 14.81 4 Camelot Capital Partners 7,694,103 6.14 5 Morgan Stanley Investment Mgt 6,041,668 4.82 6 Mubadala Investment Company 4,716,717 3.76 7 Danske Capital Mgt 2,499,699 1.99 8 Long Light Capital 2,345,000 1.87 9 Columbia Threadneedle Investments 2,039,970 1.63 10 BlackRock Investment Mgt - Index 1,863,606 1.49 11 Shore Capital Stockbrokers 1,744,603 1.39 12 UBS Securities 1,697,361 1.35 13 Interactive Investor 1,689,290 1.35 14 Hargreaves Lansdown Asset Mgt 1,624,256 1.30 15 Mr Charles Anton 1,520,550 1.21 16 Mr Rodney Style 1,480,000 1.18 17 Banque Syz & Co 1,334,339 1.06 18 Redmayne Bentley Stockbrokers 1,028,734 0.82 19 Miss Georgina Anton 1,006,500 0.80 20 Miss Francesca Anton 1,000,000 0.80 Others 17,236,863 13.75 Total 125,398,004 100.00

Disclaimer

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